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TMI Blog2023 (10) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable to goods and services tax at the rate of 18%. 3. In view of the said inverted duty structure, the petitioner claims that she is entitled to a refund of the accumulated unutilized ITC. 4. On 05.02.2021, the petitioner filed an application for refund of ITC aggregating Rs.5,47,894/- (CGST Rs.1,42,414/- + SGST Rs.4,05,480/-) for the period of July, 2020 to December, 2020 in the appropriate format (FORM GST RFD-01). The respondents issued an acknowledgment in FORM GST RFD-02 dated 10.02.2021 acknowledging the said application. Thereafter, the respondents issued the show cause notice dated 09.03.2021 in FORM GST RFD-08 calling upon the petitioner to show cause as to why her refund claim should not be rejected. The Proper Officer had flagged four issues in the show cause notice dated 09.03.2021. The first issue related to the mismatch of figures relating to eligible ITC in RFD-01 and GSTR-3B, Annexure B and GSTR-2A. The petitioner was called upon to furnish an explanation regarding the same. The second issue related to two invoices appearing at serial no. 55 and 56 of Annexure B involving the ITC of an amount of Rs.16,272.18/- which did not appear in GSTR-2A uploaded by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... although, it had availed the excess ITC in the month of October, 2020 and November, 2020, the same was on account of input suppliers not furnishing monthly returns but furnishing quarterly returns. It was explained that because of the mismatch in the period, there was excess ITC available in the returns filed by the input suppliers in the last months of the quarter -September, 2020 and December, 2020. It is the petitioner's case that if the 'relevant period' is viewed, it would be evident that the petitioner had accounted for the ITC in the month of October, 2020 and November, 2020 and that the said ITC was not reflected in GSTR-2A (data populated on the basis of the returns filed by the supplier). Thus, there was mismatch in the ITC as reflected in GSTR-2A (populated on the basis of returns filed by the suppliers). Whereas, in the month of July, 2020 and August, 2020, the input tax reflected in GSTR was less than the ITC claimed by the petitioner, it was significantly higher in the month of September, 2020. Similarly, in the month of October, 2020 and November, 2020, the ITC reflected in GSTR-2A was significantly less than the ITC as claimed by the petitioner, but in the month of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rterly basis, was not accepted on the ground that the petitioner had not provided the relevant supporting documents along with her reply. 12. The petitioner's explanation regarding one of the suppliers (M/s V. K. Polymers) erroneously classifying the supplies under HSN 6404 was also not accepted. The controversy is involved in the six invoices issued by M/s V. K. Polymers and that the Adjudicating Authority noted that the goods supplied had been classified under HSN 6404 (which covered complete footwear) in those invoices. The Adjudicating Authority reasoned that the classification of goods was a vital ingredient in GST and played a very important role in collecting the tax from the tax payer. It did not accept the petitioner's contention while observing that the petitioner had obtained the declaration from the suppliers "just to shelter their vicious thinking to gain cash refund". 13. In view of the above, the petitioner's claim for refund was rejected by an order dated 05.04.2021. 14. The petitioner filed an appeal, which was rejected by an order dated 18.02.2022. The Appellate Authority concurred with the Adjudicating Authority that the ITC amounting to Rs.1,03,210.09/- for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troversy relates to the six invoices issued by one of the suppliers (M/s V.K. Polymers). Undisputedly, the said supplier had charged the GST at the rate of 18% which is chargeable on PVC straps. There is no cavil that the tax chargeable on footwear (compete finished products) is 5% or 12%, depending on the value of the said product. The supplies made by M/s V. K. Polymers under the six invoices in question, were below the price of Rs.1,000/-. Thus, if the said supplier had supplied a complete product, it would have charged GST at the rate of 5%. According to the petitioner, the petitioner had produced a certificate from the said supplier acknowledging that it had incorrectly classified the goods under HSN 6404 instead of HSN 6406. The fact that the GST had been charged by the said supplier at the correct rate, in our view, is a material factor to be considered by the Adjudicating Authority. We find no ground to doubt the petitioner's explanation that the six invoices incorrectly mentions the classification of the goods and therefore, the petitioner ought not to be denied the benefit of the accumulated ITC. 18. We are also unable to accept the reasoning of the Appellate Authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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